fbpx
Home / Columns and Features / Bill regarding patent law receiving intense scrutiny

Bill regarding patent law receiving intense scrutiny

The 200-year-old story of the U.S. Patent and Trademark Office (PTO) is a tale in progress of American ingenuity and commerce. It is a story of how inventors turned their inventions into commercial successes.
But in today’s global economy, the story of the U.S. patent system may be getting a new chapter with an international voice. It is a chapter under intense review.
Titled the “Omnibus Patent Act of 1997,” this new chapter is a bill with six key provisions that proponents call “the most beneficial and important changes to our patent system in this century,” and a “uniquely American approach for improving the world’s best patent system.”
Supporters believe these provisions will promote desired harmonization with the patent laws of other industrial countries. Critics claim the proposed legislation will favor multinational corporations over independent inventors. They also claim it will take away from U.S. inventors some of the rights they have enjoyed for more than two centuries.
The bill will affect the organization of the PTO, its procedures, patent practice, and the current rights of inventors.
It includes changing the governing structure of the PTO to a government corporation; publishing patent applications 18 months from filing; extending the patent term for certain PTO processing delays; a prior-use defense to an allegation of infringement; and an amendment to the rules regarding re-examination to permit interested third parties to participate.
Debate centers on the bill’s Title II provision, which calls for the publication of patent applications at 18 months, and Title IV, which establishes a secret prior-use defense to an allegation of infringement.
Currently in the United States, patent applications and the innovations described in those applications are maintained secret until they are issued as patents. In other countries, where patents are granted to the “first-to-file” applicant rather than to the “first to invent,” applications are published at 18 months, regardless of whether any patent eventually issues.
In 1995, the average pendency period for a U.S. patent was about 19 months. The Trade Related Aspects of Intellectual Property (TRIPs) provisions were adopted, in part, to “harmonize” the patent law of the United States with that of major trading partners and most of the rest of the world, in accordance with the General Agreement on Tariffs and Trade. TRIPs altered the term of a U.S. patent from 17 years from issuance to 20 years from the application filing date.
Until these provisions took effect, applications could take years to mature.
Because the U.S. system permits continuing applications to be filed in the attempt to obtain a patent, applicants could continue to prosecute patent applications as long as any claim was not allowed. During this process, the applicant’s inventions are protected from disclosure. If, for whatever reasons, the applicant is unsuccessful in obtaining patent protection, the applicant can attempt to maintain the invention a secret until it can be commercialized.
These aspects of the U.S. system were available to all applicants, but were particularly attractive to individual inventors and small companies. Many such applicants could obtain patents on claims that required substantial attorney attention only by lengthening or delaying the prosecution process.
One reason applicants lengthened the prosecution period was to acquire a marketing partner, although the paradox remains that independent inventors must frequently obtain a patent to secure financing or a licensee.
Therefore, applications that were prosecuted over a term of many years occasionally resulted in the issuance of patents with claims to inventions that were novel and not marketed when filed, but were embodied in products and processes firmly established in the marketplace at the time of issuance.
The alleged infringers–typically the companies that had applied the resources to commercialize the innovation–detested these “submarine” patents.
An intended result of TRIPs was to limit–to no more than 20 years from the filing date–the period for which all related patent applications could remain pending and secret, resulting in prompt prosecution by applicants in order to achieve a meaningful and valuable patent term. The TRIPs provision eliminated the ability to lengthen or delay prosecution.
Title II of the bill requires publication of all patent applications at 18 months after the earliest effective filing date, including those claiming priority based on provisional applications. Excluded from the publication requirement are applications that do not have foreign counterparts, in which applicants are typically individuals and small companies. The provision also provides for the recovery of a “reasonable royalty” for the period between publication of the application and notification to infringers to the issuance of the patent.
Critics of Title II view the provision as eroding an applicant’s ability to commercialize inventions, particularly small companies and independent inventors. Proponents see the provision as speeding up the spread of American technology after earlier publication of technological advances. Another benefit they see is the requirement that foreign applications will be published in the United States in English, and by 18 months after the foreign priority date, which may be as little as six months after filing in the United States.
This requirement may provide an advantage to the U.S. applicant whose applications are currently published in Europe and elsewhere 18 months from the earliest application filing date. However, foreign applications are maintained secret in the United States until issuance.
This advantage may apply only to those who do not file provisional applications. Some are enthusiastic that it will sink “submarine” patents.
Detractors reply that the foreign patent offices already publish applications at 18 months, and these applications are available on data bases in the United States. Title II does not require translation into English.
The second focus of debate is Title IV, which makes secret prior use a bona fide defense to patent infringement. Proponents say that trade-secret protection is more effective than patents to protect processes, which are difficult to police. Proponents also say that it would be too financially burdensome for a trade-secret user to attempt to obtain patent protection for all valuable advances, no matter how minor.
This provision is attractive to those who seek international harmonization, because the defense is available in many foreign countries.
Detractors assert that Title IV elevates the status of trade secrets, and encourages commercial users to conceal inventions. They argue that Title IV protects commercial users of trade secrets at the expense of the constitutional exclusive rights of patentees. They also argue that inventors will be reluctant to apply for a patent, not knowing whether any, or all, potential infringers will possess the trade-secret-use defense.
Due to the overall complexities of the Omnibus Patent Act of 1997, more study of the current state of the patent law and the effects of the TRIPs provisions may be needed before the story of U.S. patent laws and the PTO is expanded beyond today’s status quo.
(Justin P. Doyle is a partner with Nixon, Hargrave, Devans & Doyle LLP. His colleague, Kelly Morron, assisted with this article.)

x

Check Also

Lori Green

Legalization of recreational cannabis likely coming down the pike for NY (access required)

The state of New York will pass a bill legalizing recreational marijuana use in: A. 2020, B. 2021, C. in ...

Five Star Bank is reopened nine branches today (photo provided by Five Star Bank).

Five Star Bank starts reopening of branches (access required)

Five Star Bank has reopened nine branch locations, ending a nearly five-month lobby shutdown due to the coronavirus pandemic. Branches ...